Nursing Home Medicare Fraud $1.5B a Year, Says New U.S. HHS-OIG Report

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Attorney General Kamala Harris, the chief law enforcement officer for the people of California, is responsible for the Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA), which is part of her Department of Justice’s (DOJ’s) law enforcement division. (Photo (right) credit: Office of Attorney General)

Nursing homes continued to bilk $1.5 billion from taxpayer-funded Medicare with impunity in 2009, says HHS inspector general’s new report

The Office of Inspector General’s November 2012 follow-up study to its December 2010 study on nursing homes’ Medicare overbilling found even further evidence of nursing homes’ ongoing bilking of the taxpayer-funded Medicare program with impunity. The November 2012 Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More than a Billion Dollars in 2009 found that in 2009 alone:

• About 25% of all claims that nursing homes billed to Medicare were erroneous.

• Nursing homes overcharged Medicare $1.5 billion.

• Nursing homes wrongfully received the total $1.5 billion in taxpayer-funded Medicare payments.

• The $1.5 billion that nursing homes misappropriated from Medicare represented 5.6% of the total $26.9 billion that Medicare paid nursing homes.

• Most (20.3%) of the 24.9% erroneous claims that nursing homes billed to Medicare were due to nursing homes that “upcoded the RUGs” (resource utilization groups), which means that nursing homes wrongfully billed Medicare for highly profitable levels of therapy and services that patients’ care and resource needs did not justify.

• Nursing homes’ Medicare upcoding of claims resulted in nursing homes receiving $1.2 billion in misappropriated Medicare payments.

• About 50% of nursing homes’ upcoded claims were for ultrahigh physical, occupational, or speech therapy, which is the highest and most expensive of five levels of therapy used to determine Medicare reimbursements to nursing homes.

• For 57% of the upcoded claims, nursing homes reported levels of therapy on the Minimum Data Set (MDS)—a federally mandated standardized assessment of a patient’s clinical condition, functional status, and care needs—that did not match the reported levels in patients’ medical records.

• For 25% of the upcoded claims, the therapy that nursing homes reported in patients’ medical records was medically unreasonable and unnecessary. For example, OIG’s November 2012 study said:

In one case, the SNF provided the highest level of therapy to the beneficiary even though the medical record indicated that the physician refused to sign the order for therapy. In another example, the SNF provided an excessive amount of therapy to the beneficiary given her condition. In another example, the SNF reported on the MDS that speech therapy was provided even though the record contained an evaluation of the beneficiary concluding that no speech therapy was needed and that speech therapy had not been provided.

• About 2% of the 24.9% erroneous claims that nursing homes billed to Medicare were for patients who were not covered by Medicare for skilled nursing care because the patients did not receive or need the care.

• For 47% of all claims that nursing homes billed to Medicare, nursing homes reported false information on the Minimum Data Set that was inconsistent with information in patients’ medical records.

HHS inspector general’s new report adds to accumulating federal reports on continuing Medicare fraud and deficient care in nursing homes

The Office of Inspector General’s November 2012 study is yet another one of OIG’s many nursing home studies that add to accumulating and overwhelming evidence amassed by the OIG, U.S. Government Accountability Office (GAO), and U.S. Senate Special Committee on Aging proving:

• Wealthy, politically connected nursing homes, especially large chains, in California and throughout the U.S. continue year after year to bilk the struggling, taxpayer-funded Medicare program through, what the OIG has euphemistically called, “questionable billing” and “inappropriate payments.”

• About 98% to 99% of nursing homes in California are cited by nursing home inspectors for deficiencies, the most common cited deficiency involving quality of care.

• The average number of cited deficiencies per nursing home in California has been higher than the average number in every state in the U.S. except a few, such as the District of Columbia.

• A substantial portion (about 17%) of nursing homes in the U.S. are cited by nursing home inspectors for serious regulatory violations involving actual harm to residents or immediate jeopardy to resident health or safety.

• State nursing home inspectors have a history of failing to investigate many complaints alleging actual harm to residents within 10 days, as required by law, and alleging immediate jeopardy to residents within the two-day requirement.

• Nursing home inspectors working for the California Department of Public Health’s (CDPH) Licensing and Certification Program are persistently deficient in their oversight of nursing homes and enforcement of laws regarding quality of care.

• The Centers for Medicare & Medicaid Services (CMS), which is responsible for monitoring state agency performance of nursing home complaint investigations, has limited oversight of the nursing home complaint investigation process.

• The Centers for Medicare & Medicaid Services has failed to take adequate steps to deter nursing homes from submitting “inaccurate, medically unnecessary, and fraudulent claims” to Medicare and to prevent Medicare from blindly paying these claims without proper review and attention.

Seemingly endless series of U.S. government and news reports on California’s poor oversight and enforcement of nursing home abuse, fraud lead to many questions

The seemingly endless series of reports by the U.S government, news media, and patients’ rights advocacy organizations on nursing homes’ ongoing Medicare fraud and elder neglect, without vigorous government oversight and enforcement, lead to many questions, such as:

• How many more nursing home reports do the OIG, GAO, and U.S. Senate Special Committee on Aging have to publish before CMS, the U.S. Department of Justice’s Offices of the United States Attorneys (OUSA) and Federal Bureau of Investigation (FBI), and Attorney General Kamala Harris’ California Department of Justice take aggressive action to stop California nursing homes’ ongoing Medicare fraud and nursing home abuse?

• Are the U.S. DOJ and chief prosecutor for Attorney General Harris’ Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA), Mark Zahner, reluctant to aggressively prosecute wealthy, politically connected nursing homes for fraud and criminal elder abuse because they are protecting the interests of the nursing home industry?

• Are local police, CDPH, and state and federal prosecutors afraid to go after nursing home owners because of what U.S. Senator Charles Grassley (R-Iowa) revealed? (Senator Grassley, a staunch and longtime advocate of abused nursing home residents and government whistleblowers, said that the “seriously corrupted” nursing home enforcement system is plagued by an intertwined, “unspoken political presence” and “high-level state bureaucrats” and “state lawmakers acting on behalf of facility administrators” who pressure law enforcement to overlook even high-level violations.)

• Are state and federal law enforcement agencies afraid that powerful lobbyists for wealthy, politically connected nursing home owners will act behind the scenes to ruin the careers of government officials who dare to try to enforce the law properly?

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